RALLY!

And we’re off! Even with the 10-year yield and USD up, the stock market continues its ascent. May 07, 2024 [WEBSITE]( | [UNSUBSCRIBE]( RALLY! SEAN RING Dear Reader, It's crucial to seize the opportunities in this market. The Rude has been consistently bullish since the end of last year, and this trend is projected to persist in the near future. Now is not the time to be on the sidelines; instead, actively participate and reap profits. We start from political premises. There are two huge reasons this market will continue climbing the “wall of worry.” One of the key factors driving the market’s upward trajectory is the election year in the four-year cycle. Politicians, including Joke Biden, incentivize the electorate to secure their votes. As H.L. Mencken once astutely observed, this political dynamic turns every election into an “advance auction sale of stolen goods.” What Mencken implies correctly is that the stolen goods are yours. The second reason is that however stupid Jay Powell may feel cutting rates in this economy, he’ll do it. And he’ll do it not out of duty to Joe Biden, as Arthur Burns did with Nixon. But he’ll do it because he doesn’t want to work for Donald Trump ever again. (And since Trump said he would fire Powell if he gets re-elected, Powell has even more incentive to put his thumb on the electoral scale.) As I near my 50th birthday, I’m too old to be outraged by these political machinations. Someone once said, “Trading is the act of becoming inhuman.” That, combined with writing about this stuff daily, has anesthetized me. So, with a clear head, we can take stock of where the market currently stands to see where it may be going. I’m not saying the market will go straight up for the rest of the year, but I’m sure it will be higher in November than now. Let’s get into the reasons why. I thank Patrick Dunuwila, CMT, Editor of The Chart Report, for organizing the below charts. The 10-Year Yield and The Dollar The first chart is The Chart Report’s Chart of the Day: Steve Strazza makes a great point here. Despite the ten-year yield and the dollar rallying this year, the stock market (and precious metals) also have. While this occasionally happens, it’s not the usual case. This is where the Fed comes in. If Powell cuts rates, the dollar will fall, and perhaps the 10-year yield. (The Fed only controls short-term rates and prays for long-term rates to follow.) A falling 10-year yield and USD will goose all asset classes, especially stocks and metals. Momentum is Bullish We’ve just had the best 3-day gain of 2024. This isn’t characteristic of bear markets. Also, notice that squiggly line above the price chart. It’s the rate of change. From StockCharts.com’s Chart School: The Rate-of-Change (ROC) indicator, also known as Momentum, is a pure momentum oscillator that measures the percent change in price from one period to the next. The ROC calculation compares the current price with the price “n” periods ago. The plot forms an oscillator that fluctuates above and below the zero line as the rate of change moves from positive to negative. The current momentum is the best since this rally started. Reclaiming the All-time High We haven’t reclaimed the ATH, but that’s when we can get excited. Above 5,255, and we’re off to 6,000. Of course, we can break down. But the probability of that happening is low. Why? See below. The 50-day and 200-day Moving Averages The price relative to its 50-day moving average tells us if we’re in an intermediate-term bull or bear market. Above the 50 DMA, we’re bullish. Below it, we’re bearish. We just got bullish again. The 200-day moving average has just broken out to an all-time high. Like the 50-day moving average, the 200-day moving average relative to price tells us whether we’re in a long-term bull or bear market. We’re miles above the 200-day moving average. [Your Credit Card: Declined?]( Take a moment and picture this scenario: The line at the gas pump is getting longer as you insert your credit card for the second time. You decide to head in and ask the cashier what’s going on. There’s a long line inside. The woman in front of you looks frustrated. Everyone does. “There’s nothing I can do. You’re declined,” the cashier says to the man at the front of the line. It’s not just you. Everyone is declined. Something doesn’t seem right. A sinking feeling sets in as you realize something has gone terribly wrong. [Click here now for an urgent new prediction from a former advisor to the CIA and Pentagon.]( [Click Here To Learn More]( And now, for some metals charts of my own. Gold When an asset ascends too rapidly, it needs to take a breather. If you notice the chart below, gold almost went straight up from the end of February to the third week of April. It broke too far away from its 50-day moving average. So, it took a breather. This pause will probably take us to the 50-day moving average, and then we’ll start our ascent again. Above the best close of 2,420 is good. Above the intraday high of 2,448.80 is better. Silver We also had a big up candle yesterday in silver. Again, above 29.00 is good. But it's better when silver gets above 29.91 (and maybe even off to the races). Crypto I find this baffling. Is crypto draining back into the yellow metal? Could that be? Because as I look at this chart, I’m not optimistic. It looks like lower highs and lower lows. And Bitcoin has fallen under its 50-day moving average. Its 200-day moving average may act like support later. It’s possible. But this is, by far, the most bearish chart in today’s newsletter. Proceed with caution. Wrap Up The SPX is looking great, as does gold and silver. We had a great day yesterday in those asset classes. I still loathe bonds in this inflationary environment, though they’d benefit from a rate cut, if only temporarily. The central banks are already in gold. Are the coiners draining into the yellow metal? Surely not. It’s too fanciful. Nevertheless, gold and silver are having their days. Bitcoin wishes it stayed in bed. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Rick Rule on Gold SEAN RING Last Friday, I got to speak with Rick Rule about gold. That, combined with my chat with Doug French the night before, means I had a great week brain-wise. We’ve already posted[my interview with Doug on the Paradigm Press YouTube channel]( so head over there to watch it when you’re free. Rick’s interview will be posted as soon as possible, but in the meantime, I had the weekend to reflect on it, and share my thoughts with you here. Gold is Insurance. You would’ve also heard this in the Doug French interview since great minds think alike. Rick isn’t excited by gold going from $2,000 to $2,400. Rick’s always owned gold, so he experienced the “Brown Bottom.” That’s when former Chancellor of the Exchequer (The UK’s equivalent of the Secretary of the Treasury) Gordon Brown announced he was selling all of the UK’s gold. Of course, traders front-ran Her Majesty’s Treasury and knocked the gold price down to $250/oz. This idiotic move cost the UK at least GBP 5 billion. Thanks to this “diversification strategy,” Gordon Brown can’t get an after-dinner speech gig. Suffice it to say, you hold gold because you’re worried your government will inflate its currency to the moon. Not because you’re looking for a few hundred dollars in profit. Returning to Average Holdings Means $8,000 - $10,000 This was my favorite part of the interview. First, let’s define a term. “Mean reversion” or “reverting to the mean” is something finance people say instead of “going back to the long-term average.” Trust me, finance is a cupcake major, so we have a bit of a Napoleon Complex next to economists. Rick mentioned that a portfolio's long-term average gold holding is 2%. Right now, the average holding is 0.5%. That means if retail starts to buy again to get their holdings merely back to 2%, the gold price will quadruple. At today’s prices, that’s anywhere from $8,000 to $10,000. This isn’t clickbait. It’s mathematics. [Secret A.I. Facility To Shock The World!]( [This A.I. chip]( looks like any other chip… yet I believe it will play a major role in the artificial intelligence boom. It’s currently being mass-produced by the millions as we speak. And you’ll never believe who’s behind these powerful A.I. chips… [Click here now for the full story.]( [Click Here To Learn More]( Why $10,000 Gold is Frightening With the above said, a $10,000 gold price is nothing to celebrate. Yes, if you’re long gold, you’ll have made a ton of money. But the purchasing power of the dollar will have been quartered. And that’s the stuff of nightmares. Using the Rule of 72 and the current (erroneously calculated) CPI of 3.5%, the dollar’s value will halve in just over 20 years (72/3.5 = 20.6 years). That’s bad enough. Imagine the price of a liter of milk going from $1.30 to $5.20. It’s horrifying. Trump or Biden? How About Neither? Rick shared a wonderful anecdote about voting for President. He knew the late, great Harry Browne, author of How You Can Profit From The Coming Devaluation, How I Found Freedom in an Unfree World, You Can Profit from a Monetary Crisis, and Fail-Safe Investing: Lifelong Financial Security in 30 Minutes. Harry was the Libertarian candidate for President in 1996 and 2000. Rick recounted the pleasure of pulling the lever for his friend Harry. I remember feeling the same when I voted for Bob Dole instead of Bill Clinton in 1996. It’s easy to not vote for Biden. Many find it hard to vote for Trump. Rick will be voting for neither. To Hell With Retirement! If there’s one thing Rick has failed at in life, it’s retirement. While Rick is still Sprott’s largest shareholder, he’s no longer on the board. This is excellent news for us. First, Rick will grade your natural resources himself(!) at [Rule Investment Media](. I will be taking advantage of this fantastic service this week. Second, Rick, with Albert Lu, founded [Rule Classroom]( in 2022. Rule Classroom is an online learning community for natural resource investors. Here, you will find video courses, interviews, and a community of natural resource investors to learn from. Basic membership is free. Third, Rick still hosts his eponymous [Rule Symposium]( every July in Boca Raton, FL. As the nation’s premier annual event on resource and commodities investing, The Rule Symposium has built an unparalleled reputation for delivering the most profitable insights in this sector – year after year. I hope you take advantage of these great offers. (FYI, while I wholeheartedly recommend each of these, you must know neither I nor anyone else at Paradigm Press have any financial incentive to do so.) Wrap Up We’ll post Rick’s full interview on the Paradigm Press YouTube Channel as soon as possible. It’s chockful of golden nuggets, many of which I’ve not written about here. And take advantage of Rick’s generous offers. A successful investor like Rick rarely opens up like this. Our gratitude should be our participation. Finally, I apologize for today’s short Rude. It’s my first time writing from the new house, and I had a hell of a time hooking up to Starlink this morning. It’s not Elon’s fault, but mine. All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting Rude Awakening.](